Union and Non-Union Plan

[steverenner]

We have a client that has maintained both a Union Plan and a separate 401(K) plan for their Salaried Employees for many years. The question has arisen from the financial advisor as to whether the plans can be combined to obtain a better price with a new recordkeeper/custodian. Here are some quick details that I am hopeful can help with some advice.

Salaried(Non-Union) Plan- 1 HCE, 5 NHCEs Salary Deferral Only- No Employer Contributions have been made for years

Union Plan- 15 NHCEs Salary Deferral and an Employer Contribution collectively bargained based on number of hours worked.

My concern with combining plans would be Union individuals receiving an employer contribution while Non-Union employees receive no employer contributions.

Any input is greatly appreciated.

Thanks!

[ETA Consulting LLC]

My concern with combining plans would be Union individuals receiving an employer contribution while Non-Union employees receive no employer contributions.

No concern at all since Union employees "MUST" be tested separately from non-union employees. So, as long as the plan operates pursuant to it's written language, the fact that they are under the same plan would not change how they are tested; which is separately.

Good Luck!

[Mike Preston]

ETA, I'd go down a slightly different path. I'd see if the existing plans don't already have language in their trust provisions that allow the investments to be combined while keeping the plans separate. Seems much easier to me.

[david rigby]

...and check to verify whether any proposed action is subject to collective bargaining in advance.

[Griswold]

Agree with David. This strikes me as more of a question for the labor and employment attorney than the ERISA attorney.